Founders: we know you’re busy. But we also know you care about corporate governance and want to stay aligned with things that impact your business’ success. We created this series to help you understand compensation fundamentals, and why they’re important.
One of the most common interview questions is, “Where do you see yourself in five years?” The way a candidate answers can give you valuable insights on their career goals and ambitions, while also helping you engage and retain them. The problem is, very few organizations actually do anything with this information once they uncover it—which is a huge mistake.
Your candidates and employees are looking for more than competitive compensation now—they want to see career progression and increased compensation in the future as well. Establishing career ladders alongside your job levels and pay bands can help candidates and employees envision their futures at your organization, so they stay.
Career ladders are a management tool to show candidates and employees how they can progress to higher levels of pay, skill, responsibility, or authority at your organization. They clearly define the job description, skills, expectations, impact, work experience, education, or other requirements needed to move up the ladder. This provides transparency so employees know how to reach their career goals, and managers know when they’ve achieved those goals.
Career ladders help you make more consistent, fair decisions around promotions. This improves employee recruitment, engagement, and retention, while reducing bias and improving the quality of your workforce:
Building career ladders generally falls to the human resources team, often in conjunction with departmental leadership. If this is a strategic initiative for your organization, here’s what you should look for when planning, reviewing, and approving your organization’s job levels:
Read more about pay transparency and best practices for company-wide roll-outs: Opening Up About Comp Isn’t Easy — Here’s How to Get More Transparent.
Establishing job levels and pay bands are crucial to building a compensation strategy that can improve your recruiting and retention efforts—but they can only get you so far. Career ladders take those principles a step further to show employees what their future at your organization could look like. Rewarding employees with promotions and corresponding compensation increases will show that you value them, making it more likely that they stay long-term. Candidates today have many opportunities available to them, and you can differentiate your organization as an employer by investing your employees.
Read more in the founders series: